Endeavour Group (EDV) Q1 2025 TU earnings summary

Executive summary

• Group sales for the quarter reached AUD 3.1 billion, up 0.5% year-over-year, with Retail flat at AUD 2.54 billion and Hotels up 2.5% to AUD 567 million, reflecting stable trading amid cost-of-living pressures impacting consumer spending.

• Diversified portfolio offset retail moderation with stronger hotel performance, highlighting the advantage of combined on-premise and off-premise offerings.

• Retail maintained market share in a challenging environment, with My Dan's loyalty base reaching 5.5 million active members.

• Brand and customer metrics remained strong, with Dan Murphy's Voice of Customer score at 81 and BWS improving to 75.

• Cost of living pressures impacted consumer spending, but the diversified portfolio provided resilience.

Financial highlights

• Online retail sales rose 6.3% to AUD 235 million, representing 9.3% of total retail sales, with BWS seeing double-digit online growth.

• Retail EBIT margin (excluding One Endeavour costs) expected between 7% and 7.5% for H1, down from 8% in the prior year.

• Pinnacle Drinks exclusive brands delivered another quarter of sales growth, with 120 new products released.

• Promotional intensity and consumer down-trading led to a lower margin sales mix and impacted profitability.

• Capital expenditure for FY25 remains guided at AUD 450–500 million; finance costs expected at AUD 310–325 million.

Outlook and guidance

• Achieving retail sales growth in Q2 is expected to be challenging due to cycling 3% growth in the prior year and continued elevated promotional activity.

• Hotels maintain positive momentum into Q2, with Christmas bookings at 54% capacity and positive sales momentum continuing in October.

• Cost inflation remains a headwind; cost management and efficiency programs are ongoing.

• One Endeavour operating expenses for FY25 guided at AUD 60–80 million, split 70% retail/30% hotels, equally weighted across halves.

• Capital and operating costs for One Endeavour program expected within guidance.